Shares of Continental Gold (CNL-T) surged $1.09 or 12% to $9.90 apiece with more than six million shares changing hands on news of an updated resource estimate for the company’s Buriticá project in Antioquia, Colombia.
Measured and indicated resources have grown to 3.74 million tonnes grading 13.6 grams gold per tonne for 1.64 million oz. gold, 38 grams silver per tonne for 4.6 million oz. silver, and 0.7% zinc for 55.8 million lb. zinc at a cut-off grade of 3 gram gold per tonne.
Inferred resources add 13.33 million tonnes of 8.8 grams gold for 3.76 million oz. gold, 33 grams silver for 14.20 million oz. silver, and 0.5% zinc for 156.50 million lb. zinc.
The new resource is based on 112,600 metres of drilling and 2,332 metres of underground sampling and includes both the Yaraguá and Veta Sur vein systems. But the updated resource estimate excludes a number of veins in these systems due to limited drilling as of June 30.
Most of the vein domains modeled in both Yaraguá and Veta Sur are open at depth and along strike.
The Yaraguá system has been defined along 900 metres of strike length and 1,300 vertical metres, and partially sampled in underground developments. Veta Sur has been defined along a strike length of 570 metres and 1,180 vertical metres.
The company describes the systems as being characterized by multiple, steeply dipping veins and broader, more disseminated mineralization.
Continental Gold, headed by Ari Sussman as chief executive officer, became a public company two and a half years ago and released its first resource on Buriticá in September 2011. Work on a preliminary economic assessment got underway in March.
About 75 km northwest of Medellín, Buriticá is accessible by paved road and is Continental’s 100%-owned, 289-sq.-km flagship project.
According to the company’s website, the Buriticá complex is made up of a fine grained, dioritic intrusion that has an outcrop area of about 2 km by 2.5 km. It also includes a small body of intrusive breccia called the Yaraguá diatreme. Three generations of alteration have been mapped: an early silicification affecting Cretaceous sediments on the north and south flanks of the intrusive, a zoned potassic-phyllic-propylitic sequence, and a later, retrograde silica-sericite event associated with the emplacement of the diatreme and gold mineralization.
Buriticá is the northernmost significant deposit in the upper Miocene Middle Cauca belt, one of the three major gold belts identified in Colombia, the company says. The belt contains porphyry and vein style mineralization in addition to the porphyry-related carbonate base metal gold vein/breccia system seen at Buriticá.
In mid-September, Continental released results of initial drilling and underground channel sampling of old workings in the La Estera and La Mano areas, new mineralized vein systems south of the Yaraguá and Veta Sur deposits. La Estera is between 100 and 300 metres south of the Veta Sur deposit and La Mano is about 300 to 400 metres south of the Yaraguá deposit.
Drilling and underground channel sampling at La Estera uncovered up to three high-grade silver and gold vein systems (Northern, Central and Southern La Estera) and drill highlights included intercepts of 3.6 metres of 6.8 grams gold and 1,061 grams silver and 4.4 metres of 8.3 grams gold and 41 grams silver. Channel sampling returned results including 6.2 grams gold and 362 grams silver over 1 metres; and 6.8 grams gold and 454 grams silver over 1.2 metres.
At La Mano, drilling returned intercepts of 1.0 metre of 9.1 grams gold and 1 gram silver; 1.65 metres of 6.6 grams gold and 9 grams silver; and 0.42 metres of 11.3 grams gold and 187 grams silver.
In late August, Continental received permission to modify its existing Environmental Impact Assessment in order to build a 6-km switchback road from the existing paved road at the town of Buriticá down into the Higabra valley, where it plans to build the mine and mill.
The amendment to the permit allows Continental to start underground development in the valley by building a 5 metre by 4.5 metre, 1-km access tunnel, which gives Continental access for underground drilling to infill drill both the Yaraguá and Veta Sur systems. Eventually the tunnel will serve as the main access for all underground development.
At presstime Continental was trading at $9.43 per share in Toronto within a 52-week band of $5.35-$10.02. The exploration and development company has about 111 million shares outstanding.
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